You May Not Get Maximum Social Security Benefits — So Do It | Smart Changes: Personal Finance

(Murray Beckman)

Social Security doesn’t pay all seniors the same amount. Instead, the monthly benefits you’re eligible for depend on your personal salary history.

The maximum monthly benefit you can get in 2022 is $4,194. However, most seniors do not qualify for such a high payday. If you’re in the same boat, that’s really not something to stress about.

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Hard to get the most out of it

To get the maximum monthly benefit from Social Security, you need to do the following:

  • Working for at least 35 years
  • Earn big in 35 of the highest-earning years in the workforce
  • Delay your Social Security application until age 70

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Now you can argue that working for 35 years is not that hard. But making a lot of money is even harder. Specifically, to receive maximum Social Security benefits, you need more than 35 years of income at or above the annual salary cap.

For context, the salary cap is $147,000 this year and $142,800 last year. So even if your average salary for the past two years was $100,000 — an impressive figure in itself — it’s not enough to get you the most benefits.

Finally, deferring your application until age 70 usually means having to work until that age. Health concerns or layoffs could hinder the program, forcing you to apply for Social Security as soon as possible.

Don’t pursue your best interests

It can be tempting to try and get the maximum monthly benefit that Social Security will pay. But since that’s such a hard thing to do, a better option might be to focus on building a solid reserve for yourself. If you save enough, you’ll set yourself up for a comfortable retirement, even if your monthly Social Security benefits are half the maximum or less.

Imagine being able to fund an IRA or 401(k) plan for 35 years with $500 monthly contributions. Invest heavily in stocks and your retirement plan could earn an average 8% annual return, which is slightly below the broader market’s historical average. All in all, this will leave you with a little over $1 million worth of reserves. Increase your monthly contribution to $600 during this period and you’ll have $1.24 million in your name.

Focus on building savings

There’s nothing wrong with getting as much money out of Social Security as possible. But don’t expect to get the maximum monthly benefit because it’s really hard to get. Instead, do your best to build savings so you don’t have to worry about what Social Security pays you.

Also keep in mind that even if your income isn’t enough to help you get the highest possible Social Security benefits in retirement, deferring your filing until age 70 will increase your benefits by 24% to 32% Yes Entitled, subject to your full retirement age. This alone can get you a good monthly salary to look forward to.

Most retirees completely ignore the $18,984 Social Security bonus

If you’re like most Americans, your retirement savings is years (or more) behind. But some lesser-known “Social Security secrets” can help ensure a boost to your retirement income. Example: One simple trick could set you back $18,984…a year! Once you learn how to maximize your Social Security benefits, we think you can retire with peace of mind and peace of mind. Just click here to learn how to learn more about these strategies.

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